Hardrock Mining: State Regulation

March 14, 2005 RL32813

Various state and federal laws play important roles in the regulation of mining activities. Mining for hardrock minerals on federal public lands is governed primarily by the General Mining Act of 1872. The General Mining Act authorizes a prospector to locate and claim an area believed to contain a valuable mineral deposit, subject to the payment of certain fees. The General Mining Act does not, however, require payment of a production-related royalty, as is required for federal oil, gas, and other minerals governed by more recently enacted laws. Critics of the General Mining Act suggest that the lack of a royalty payment serves as an unnecessary subsidization of the mining industry, while proponents of the current system suggest that it encourages investment in the domestic mining industry. Legislation has been introduced in previous Congresses that would have required royalty payments, but such provisions have not been enacted into law. Many states have enacted laws governing mineral rights and mineral development on state-owned lands. Of these laws, those applicable to hardrock minerals on state-owned lands vary considerably. Unlike the comparable federal law, however, many states now provide for state-owned hardrock mineral leases and authorize royalty and rental payment collection. In addition to financial issues, environmental regulation of hardrock mining also varies significantly under federal and state law. Significantly, the federal Surface Mining Control and Reclamation Act, which requires certain environmental remediation activities with respect to surface coal mining on federal and non-federal lands, is not applicable to hardrock minerals. Legislative proposals to address concerns related to hardrock mining environmental impacts and abandoned mine reclamation have been introduced in past Congresses (e.g. H.R. 2141 and H.R. 504 in the 108th Congress), but none have been enacted into law. In addition to federal regulation, states are authorized to implement surface mining reclamation laws and many have chosen to regulate hardrock mining operations in addition to surface coal mining. These laws vary from state to state, but most apply equally to federal, state, and private lands. This report provides a survey of state laws governing these above-mentioned aspects of hardrock mining. It is not meant to serve as a comprehensive description of each state's regulatory program, but instead provides an overview of the regulation of several specific activities associated with hardrock mineral development; focusing on (1) state imposed royalty rates and rental charges for hardrock minerals on state lands and (2) reclamation and bonding requirements for hardrock mining activities applicable to all mining operations.

Order Code RL32813
CRS Report for Congress
Received through the CRS Web
Hardrock Mining:
State Regulation
March 14, 2005
name redacted
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress
Hardrock Mining: State Regulation
Summary
Various state and federal laws play important roles in the regulation of mining
activities. Mining for hardrock minerals on federal public lands is governed
primarily by the General Mining Act of 1872. The General Mining Act authorizes
a prospector to locate and claim an area believed to contain a valuable mineral
deposit, subject to the payment of certain fees. The General Mining Act does not,
however, require payment of a production-related royalty, as is required for federal
oil, gas, and other minerals governed by more recently enacted laws. Critics of the
General Mining Act suggest that the lack of a royalty payment serves as an
unnecessary subsidization of the mining industry, while proponents of the current
system suggest that it encourages investment in the domestic mining industry.
Legislation has been introduced in previous Congresses that would have required
royalty payments, but such provisions have not been enacted into law.
Many states have enacted laws governing mineral rights and mineral
development on state-owned lands. Of these laws, those applicable to hardrock
minerals on state-owned lands vary considerably. Unlike the comparable federal law,
however, many states now provide for state-owned hardrock mineral leases and
authorize royalty and rental payment collection.
In addition to financial issues, environmental regulation of hardrock mining also
varies significantly under federal and state law. Significantly, the federal Surface
Mining Control and Reclamation Act, which requires certain environmental
remediation activities with respect to surface coal mining on federal and non-federal
lands, is not applicable to hardrock minerals. Legislative proposals to address
concerns related to hardrock mining environmental impacts and abandoned mine
reclamation have been introduced in past Congresses (e.g. H.R. 2141 and H.R. 504
in the 108th Congress), but none have been enacted into law. In addition to federal
regulation, states are authorized to implement surface mining reclamation laws and
many have chosen to regulate hardrock mining operations in addition to surface coal
mining. These laws vary from state to state, but most apply equally to federal, state,
and private lands.
This report provides a survey of state laws governing these above-mentioned
aspects of hardrock mining. It is not meant to serve as a comprehensive description
of each state’s regulatory program, but instead provides an overview of the regulation
of several specific activities associated with hardrock mineral development; focusing
on (1) state imposed royalty rates and rental charges for hardrock minerals on state
lands and (2) reclamation and bonding requirements for hardrock mining activities
applicable to all mining operations.
Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
List of Tables
State-by-State Summaries of Hardrock Mining Regulation . . . . . . . . . . . . . . . . . 4
Hardrock Mining: State Regulation
Overview
Both federal and state laws play important roles in the regulation of the mining
activities. Mineral development rights on federal public lands are governed by
several statutes applicable to specific resources. The 1872 General Mining Act1
governs access to hardrock minerals2 on federal public lands. The General Mining
Act authorizes claimants to locate and patent lode and placer claims on federal public
lands.3 Briefly, to stake a legitimate claim a prospector must locate a valuable
mineral deposit4 on or underlying federal lands eligible for entry under the act,5 and
comply with the procedures set out in the regulations of the Bureau of Land
Management (BLM).6 The claimant may remove all minerals from the claim, subject
to the terms of the Mining Act, even without obtaining a patent (title) to the minerals
or lands.7 The Mining Act does require the payment of certain fees to insure that a
1 General Mining Act of 1872, Act of May 10 1872, ch. 152, 17 Stat. 91, codified at 30
U.S.C. §§ 21-54 (2003).
2 Hardrock minerals include most metals and non-fuel nonmetals, such as gold, silver,
copper, zinc, barite, and fluorspar.
3 A lode is a mineral deposit found in a continuous vein form that is reasonably
distinguishable from neighboring nonmineral rock. Common examples are gold, silver, or
tin. 30 U.S.C. § 23. A placer claim is defined as those mineral deposits which are not lodes,
and are usually widely dispersed, unconsolidated mineral deposits such as gypsum.
Location is the process by which a mining claim is found and its boundaries delineated.
Patenting is a method through which the federal government passes title to a private entity.
4 30 U.S.C. 22, 23; see United States v. Coleman, 390 U.S. 599 (1968).
5 30 U.S.C. §§ 23, 28, 35-36.
6 43 U.S.C. § 1744(a), (c).
7 The law also authorizes mineral claimants to patent — or acquire title to — the federal
lands or minerals encompassed within a mining claim, so long as established procedures are
satisfied and specified conditions are met. 30 U.S.C. §§ 29, 37. The availability of a patent
is often cited as a reasonable incentive to encourage domestic mining operations, or
conversely as an anachronistic windfall to industry. See Andrew P. Morriss, et al.,
Homesteading Rock: A Defense of Free Access Under the General Mining Law of 1872, 34
ENVTL. L. 745 (2004); Daphne Werth, Comment, Where Regulation and Property Rights
Collide: Reforming the Hardrock Act of 1872, 65 U. COLO. L. REV. 427, 443 (1994). It
should be noted that the minerals on a valid claim may be developed without a patent, and
Congress has imposed an annual moratorium on the processing of new patent applications,
most recently in Pub. L. No. 108-447.
CRS-2
claim is maintained;8 however, unlike the laws governing oil, gas, and several other
minerals, the Mining Act does not require payment of a production-related royalty.
Legislation has been introduced in previous Congresses to reform the General Mining
Act in a variety of ways, including provisions for royalty payments, although no such
legislation has been enacted into law.9
Most states also have statutes governing exploration and mining on state lands,
with laws ranging from single-paragraph authorizations to detailed regulation
applying different standards to different minerals and land classifications. This
makes it difficult to describe a common model for state mining regulation. Many
states, like the federal system outlined above, provide separate regulatory regimes for
hardrock minerals and oil, gas, and coal. Unlike current federal law, however, many
states now charge royalty fees associated with hardrock mineral production in
addition to land use rental fees. In some instances royalty and rental rates are
specified by statute, and, in others, such determinations are left to state administrative
agencies.
State and federal law also regulate certain aspects of the environmental impacts
caused by mining activities, often regardless of whether such activities take place on
federal, state, or private lands. At the federal level, multiple environmental laws will
generally impact mineral development, including the National Environmental Policy
Act,10 the Clean Air Act,11 the Federal Water Pollution Control Act (Clean Water
Act),12 the Safe Drinking Water Act,13 the Toxic Substance Control Act,14 the
Comprehensive Environmental Response Compensation and Liability Act,15 and the
Endangered Species Act.16
In addition, the federal Surface Mining Control and Reclamation Act
(SMCRA)17 was enacted to regulate the environmental impacts of surface coal
mining operations on federal, state, and private lands. SMCRA requires coal mine
operators to obtain a permit for surface mines or surface operations associated with
underground mines and provides specific reclamation standards for land and
8 30 U.S.C. § 28f(a).
9 See Robert J. Uram, Prospects for Mining Law Reform, 12 NAT. RESOURCES & ENV'T 191,
191-95 (1998) (providing an overview of attempts to reform the General Mining Act).
10 42 U.S.C. §§ 4321-4347.
11 42 U.S.C. §§ 7401-7671.
12 33 U.S.C. §§ 1251-1387.
13 42 U.S.C. §§ 300f-300j(25).
14 15 U.S.C. §§ 2601-2692.
15 42 U.S.C. §§ 9601-9675.
16 16 U.S.C. §§ 1531-1544.
17 30 U.S.C. §§ 1201-1338.
CRS-3
resources affected by these activities.18 In addition, operators must, among other
things, submit reclamation and operation plans and supply performance bonds and
financial guarantees sufficient to cover the costs of reclamation.19 The states are
authorized to implement SMCRA, and, while its provisions are not applicable to
hardrock mining operations, many states have enacted state laws with similar
reclamation requirements applicable to hardrock mining activities as well.20
This report provides a survey of state laws governing hardrock mining. It is not
meant to serve as a comprehensive description of each state’s regulatory program, but
instead provides an overview of the regulation of several specific activities associated
with hardrock mineral development. This report focuses on (1) state imposed royalty
rates and rental charges for hardrock minerals on state lands and (2) reclamation and
bonding requirements for hardrock mining activities. As mentioned above, state
reclamation and bonding requirements are typically applicable on federal state and
private lands. Variations from this scheme are specifically identified.
18 See id. §§ 1265(b)(1)-(25), 1291(28), 1266(b)(1)-(12).
19 See 30 U.S.C. § 1259(a), (b). The performance bond must cover the entire area of mining
operations and is “conditional upon faithful performance” of all SMCRA and permit
requirements. The exact amount is set by the regulatory authority, federal or state as
appropriate, and can be forfeited if the operator fails to adequately perform the requisite
reclamation. Several different types of bonds are permissible under the act and additional
alternative bonding programs may be implemented with approval by the Secretary of the
Interior. See also 43 C.F.R. §§ 3809.500 to 600(BLM bonding requirements for locatable
minerals; 43 C.F.R. § 3452.3(b) (bond required under the Mineral Leasing Act); 36 C.F.R.
§ 228.13 (U.S. Forest Service bonding requirements).
20 Id. § 1253(a).
CRS-4
State-by-State Summaries of Hardrock Mining Regulation
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Alabama
Ala. Code §§ 9-17-60 et seq. The Commissioner of
ALA. CODE §§ 9-16-1 et seq. The state requires a surface
Conservation and Natural Resources (CNR) is authorized to
mining permit that applies to hardrock mining operations.
lease any lands under CNR jurisdiction for exploration,
Section 9-16-7 governs basic reclamation requirements.
development, and production of oil, gas and other minerals.
A performance bond is required under section 9-16-8 for
Lands of any other state agency may be leased for mineral
surface mining. Bond form is to be determined by the
development by the Commissioner upon written request of
director of the state Department of Industrial Relations,
the head of such agency.
signed by the operator as principal and a state licensed
corporate surety. The bond amount is set by statute at $2,500
Land is leased on the basis of competitive bids with leases
for each acre covered by the permit. In lieu of this bond, the
going to the highest bidder or otherwise most advantageous
operator may deposit cash or negotiable U.S. bonds or AL
offer. (9-17-65). State law does reference rentals,
state or municipal bonds. AL law also provides for
royalties and other revenues, designating which state
increasing or reducing the total penalty of the bond (or
agencies and state funds will receive which proportions of
cash/securities) as land is added to or withdrawn from the
accrued funds. (9-17-65). State statute does not, however,
permit. (9-16-6). Bond substitution is required if the
appear to set a particular royalty or rental rate for state-
corporate surety cancels the bond or loses its AL license.
owned hardrock minerals.
When an operator has completed reclamation on a given tract
of land, the bond is to be released. Bonds may be forfeited
pursuant to civil action for violations of final director orders.
(9-16-11). Forfeited bonds are placed in the Surface Mining
Reclamation Fund and used for reclamation purposes. (9-16-
12).
CRS-5
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Alaska
ALASKA STAT. §§ 38.05.135 et seq. State owned lands are
ALASKA STAT. §§ 27.19.010 et seq. Minerals other than oil,
generally open to mineral development and may be obtained
gas, and coal are subject to the following reclamation
by “permit or lease for the purpose of exploration,
standards. Mines are to be operated in a manner that prevents
development, and the extraction of minerals.”
“unnecessary and undue degradation” of land and waters, and
the operation must be reclaimed so as “to leave the site in a
Hardrock mineral royalty rates are set by statute at 3% of
stable condition.” (27.19.020). A reclamation plan must be
net income as determined under section 43.65. (38.05.212).
approved before mining can take place, and financial
They are also subject to the exploration incentive credit
assurance in an amount reasonably necessary to ensure
authorized by section 27.30. Royalties may be taken in kind
performance of the plan must be provided.
when the commissioner of the Division of Lands
Financial assurance is generally capped at $750 per acre,
determines it to be in the best interests of the state.
but there is no cap for lode claims. A bonding pool is also
(38.05.182). Interest on late royalty payments is also
provided for certain eligible mining operations where
provided for at the higher of 11% or “the rate of five
participants pay a deposit and an annual fee not to exceed
percentage points above the annual rate charged member
15% and 5% of the otherwise required financial assurance
banks for advances by the 12th Federal Reserve District as
amount, respectively. (27.19.040).
of the first day of that calendar quarter ....” in which the
Bonds may take the following forms: (1) a surety bond; (2) a
royalty is deemed late. (38.05.135).
letter of credit; (3) a certificate of deposit; (4) a corporate
guarantee that meets certain financial tests; (5) payments into
The holder of a mineral interest must pay a yearly rental fee
the mine reclamation trust fund; or (6) any other form that
in advance for the right to continue to hold the mining right.
meets the above-referenced financial tests. (27.19.040).
Rental fees are set at $200 for a two-year term for each site
Violation of reclamation requirements results in forfeiture of
and are thereafter determined by formula based on the
the bond to the state pool. (27.19.040). Violators must pay
number of years since location and either the number of
five times the normal bond amount for future operations.
lease acres or number of claims held. Rental amounts are
(27.19.070).
also credited against the production royalty. (38.05.211).
Failure to pay rent/royalty constitutes abandonment of
mining rights. (38.05.265).
CRS-6
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Arizona
ARIZ. REV. STAT. §§ 27-231 et seq. The state land
Financial Security for State Mineral Leases: ARIZ. REV.
commissioner is authorized to lease state-owned metallic
STAT. § 27-235(E). The land commissioner may require
ore and industrial minerals.
financial security to guarantee payment of royalties.
Financial security is also required for (1) surface reclamation
Rental: The commissioner must establish the annual land
to a reasonable condition as described in the lease and (2)
rental for each lease prior to issuance. Rental fees are based
losses to land caused by specified damages. Form: cash
on an appraisal of the land not including the contributory
deposit, a certificate of deposit, a surety bond or any other
value of mining. The annual rental must also be (1) at least
form of financial assurance acceptable to the commissioner.
the average rental assessed in Colorado, New Mexico and
Utah; and (2) payable in advance of lease agreement
Metal Mine Reclamation: ARIZ. REV. STAT. §§ 27-901 et
execution and at the beginning of each annual period
seq., applicable to non-state lands only. Reclamation plan and
thereafter. (27-234(A)). Royalty appraisal costs are added
financial assurance required for surface disturbances over
to the amount due as rental. (27-234(E)).
five acres. (27-921, 27-923, 27-951). Plans must be renewed
annually and be accompanied by additional financial
Royalties must be at least 2% of the gross value of
assurance, if necessary. (27-955). Financial assurance must
produced minerals, and are to be paid monthly based on the
be in a form provided for in 40 C.F.R.§ 264.143(f) or other
previous month. (27-234(B), (I)). The commissioner may
form acceptable to the inspector. (27-991, 27-931). Amount:
raise rates based on standard appraisal methods and market
Inspector determines amount, assuming 3rd party will reclaim
rates to obtain fair market value. Royalty appraisal is
land, unless operator can show financial ability to perform
performed before the lease is issued and at each renewal.
reclamation; generally $2000 per acre of disturbance, unless
Rates may be adjusted at any time if circumstances justify
reduction based on rules or ability of operator to perform
changes. (27-234(C)). Gross value of minerals produced is
reclamation is established. (27-992, 27-993). Operators may
based on: (1) monthly average price as quoted by the
apply for release for reclaimed areas and may provide
mineral commodities market/industry trade journals, as
financial assurance incrementally. The Inspector must adopt
determined by the commissioner and specified in the lease;
rules for forfeiture that provide for a hearing. (27-995 - 27-
or (2) an appraisal that establishes the fair market price if
997).
there is no published price quote. (27-234(B)).
CRS-7
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Arkansas
ARK. CODE ANN. §§ 22-5-801 et seq. The Commissioner of
The Arkansas Open-Cut Land Reclamation Act: ARK.
State Lands is authorized to lease oil, gas and “other
CODE ANN. §§ 15-57-301 et seq. applicable to open-cut
minerals” on state lands. A lease or permit is required
mining for “materials for commercial purposes.”
before “taking” any minerals. (22-5-805).
Bond form: cash, securities, or other collateral, including
letters of credit and mortgages on real property, as prescribed
Royalties: The Natural Resources Committee must establish
by Dep’t of Envtl. Quality. Bonds must be signed by the
a schedule of minimum fees and royalties, as well as the
operator and a licensed corporate surety. (15-37-316).
terms and conditions for various types of permits and leases. The bond amount shall be equal to the estimated reclamation
No permit or lease can be granted for less than the
cost. The Dep’t may retain independent experts to establish
minimums prescribed in the schedule. (22-5-804).
the amount. Bond amounts may be altered as necessary.
Accurate accounting of produced minerals is required, and
Bond and substituted security regulations must be
lease/permit holders must pay monthly royalties based on
promulgated to ensure small operators will not be precluded
the amount of “actual consideration” for the minerals taken
from developing mineral resources due to high bond
under the lease or permit. The holder of lease/permit is
amounts. (15-57-316).
absolutely liable for all royalties, and the Commissioner
Forfeiture: Bonds are conditioned on compliance with all
may require a corporate surety bond to guarantee the royalty
statutory and regulatory requirements and are subject to
payment. (22-5-809).
forfeiture until the affected area has been reclaimed,
approved, and released. (15-57-317). Operators with
substantial violations may not receive a new or renewed
permit unless a change of circumstances justifies an
exception. (15-57-316).
Bond release may be incremental and occurs on a Dep’t
determination that land has been reclaimed. (15-57-316).
CRS-8
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
California
State statutes do not appear to specify which minerals are
Reclamation: Surface mining operations require submission
leasable; however, mineral leases are referenced in multiple
and approval of a reclamation plan. (CAL. PUB. RES. CODE §
provisions, described below.
2770).
Financial Assurance is required of all operators until
Rent: The lease must provide for an annual rental of not less
reclamation is complete. Assurance must be approved by the
than $1 per acre, as determined by the State Lands
lead agency and resubmitted annually. (2770, 2207). Form:
Commission. (CAL. PUB. RES. CODE § 6895).
surety bonds executed by an admitted surety insurer,
irrevocable letters of credit, trust funds, or other forms of
Royalty: The lease must provide for a royalty, to be taken in
financial assurances specified by the Board, which are
money or in kind, at the option of the Commission, of not
determined to be adequate. The amount is to be adjusted
less than 10 percent of the gross value of all mineral
annually to account for new lands disturbed by surface
production from the leased lands. (6895).
mining operations, inflation, and accomplished reclamation.
(2773.1).
Until a mining permittee applies for a lease for a mining
To pursue forfeiture, the Board must hold a public hearing,
area, all minerals produced from the area that would be
determine that operator is financially incapable of or has
covered by a permit are subject to a 20% royalty. (6896).
abandoned reclamation, notify the operator that forfeiture
will be sought, and allow 60 days for reclamation to
An annual reporting fee is also required and is to be
commence. Upon forfeiture, use of the proceeds must be to
adopted by the Mining and Geology Board for each active
reclaim land. (2773.1).
or idle surface mining operation. The maximum fee for any
Release occurs upon written notification by the lead agency
single mining operation may not exceed $4,000 annually
that reclamation has been completed in accordance with the
and may not be less than $100 annually. In addition, the
plan. (2773.1).
board shall collect $5 per ounce of gold and ten cents per
ounce of silver. (2207).
CRS-9
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Colorado
The State Board of Land Commissioners may lease state
Performance and financial warranties are required before a
land for the removal of minerals. The Board must
mining permit may be issued. A performance warranty is a
determine a rent to be charged and a royalty amount to be
written promise by the operator to meet reclamation
applied to produced minerals. (COLO. REV. STAT. § 36-1-
requirements. A financial warranty is a written promise to be
113).
responsible for reclamation costs up to the amount specified
by the Board, together with proof of financial responsibility.
The Board has the authority to adjust rentals under any
The Board must prescribe the amount and duration of
existing, expired, or defaulted lease when, in its opinion,
financial warranties and adjust amounts from time to time.
conditions justify changes. (36-1-114).
(COLO. REV. STAT. § 34-32.5-117).
Surety may be: (1) a surety bond issued by a corporate surety
All leases of state or school land are conditioned upon the
licensed in CO; (2) a letter of credit issued by a U.S. licensed
payment of rent in advance, and the violation of this
bank; (3) a certificate of deposit; (4) a deed of trust or
condition results in a forfeiture of the lease, at the option of
security agreement encumbering real or personal property and
the Board. (36-1-117).
creating a first lien in favor of the state; (5) assurance that,
upon commencement of production, the operator will
establish a trust comprised of periodic payments representing
a fraction of receipts, (6) a lien on project fixtures and
equipment of sufficient value, (7) a certified financial
statement for the warrantor’s most recent fiscal year and a
certification by an independent auditor that the financial
warrantor is the issuer of one or more currently outstanding
senior credit obligations that have been rated “A” or better by
a nationally recognized rating organization and the
warrantor’s net worth is at least two times the amount of all
financial warranties; (8) a certified financial statement for the
financial warrantor’s most recent fiscal year
CRS-10
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Colorado (cont.)
and a certification by an independent auditor that (a) the
warrantor’s net worth is at least ten million dollars and is at
least two times the amount of all financial warranties, (b) the
warrantor’s tangible fixed assets in the U.S. are worth at least
twenty million dollars, (c) the financial warrantor’s total
liabilities-to-net-worth ratio are not more than two to one;
and (d) the warrantor’s net income, excluding nonrecurring
items, is positive; (9) proof that the operator is a department
or division of state government or a unit of county or
municipal government.
Operators may file a written notice of reclamation
completion, and, subject to Board inspection, the Board must
release all applicable warranties. If the Board finds
noncompliance with reclamation requirements, then it must
notify the operator within 60 days of property inspection.
(34-32.5-117).
Forfeiture may be pursued when an operator has violated a
cease and desist order, an operator is in default under his
performance warranty, or a warrantor has failed to maintain
his financial warranty in good standing or no longer has the
financial ability to carry out his obligations. The Board must
notify the operator and all warrantors and provide opportunity
for a hearing. Forfeited funds must be used to reclaim lands.
(34-32-118).
Connecticut
State statutes do not appear to address leases, royalties, or
State statutes do not appear to address reclamation and
rental fees for state-owned hardrock minerals.
bonding requirements for hardrock mining operations.
CRS-11
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Delaware
The Department of Natural Resources and Environmental
Submerged lands bonds: Sufficient bonding or insurance
Control may lease public lands for “the exclusive right of
requirements, as determined by the Secretary, are required to
mining, exploring by geophysical and other methods, and
secure performance and the faithful compliance by the lessee
operating for and producing therefrom, oil, gas, casing head
with lease terms and to secure the public against damages
gas, casing head gasoline ....” It is not clear whether this
arising from operations. (DEL. CODE ANN. tit. 7 § 6115).
includes hardrock minerals. (DEL. CODE ANN. tit. 7 §
The Secretary may require, prior to any exploration or
4511).
exploitation of offshore minerals, that a bond in the amount
of at least $1,000,000 be posted to secure the State against
Rent payments associated with the lease of public lands are
any damages or claims arising from the offshore operations.
to be deposited with the State Treasurer and placed in a
(29 § 8003).
specified account. (7 § 4512).
Offshore and submerged land mineral (including hardrock
mineral) leases may be granted by the Governor and the
Secretary of the Dep’t of Nat. Res. and Envtl. Control. (7 §
6102).
Royalties for offshore production are set by statute at not
less than 12.5 % of production; however, it is unclear if this
is meant to apply to minerals other than oil. (7 § 6112).
Annual rental of submerged lands is to be at least 25 cents
per acre, as specified by the Secretary. (7 § 6114).
CRS-12
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Florida
Mineral Leases: The Board of Trustees of the Internal
Reclamation: FLA. STAT. ANN. §§ 378.401 et seq. The
Improvement Trust Fund may sell or lease any mineral or
Department of Environmental Protection must require
similar substance in, on, or under state land “the title to
operators to submit and abide by a reclamation plan with
which is vested in the state, the Department of Management
baseline reclamation standards for various categories of
Services, the Department of Environmental Protection, the
minerals established by law.
Fish and Wildlife Conservation Commission, the State
Financial Security: The Board of Trustees may require a
Board of Education, or any other state board, department, or
surety or property bond, an irrevocable letter of credit, or
agency; provided that the board of trustees may not grant
other proof of financial responsibility from each lessee of
such a sale or lease on the land of any other state board,
public land or mineral interest prior to any mineral
department, or agency without first obtaining approval
extraction. The surety bond or irrevocable letter of credit
therefrom.” (FLA. STAT. ANN. § 253.45).
must be from a surety company or bank authorized to do
business in FL. The surety bond, irrevocable letter of credit,
Royalty and rent provisions do not directly address
or other proof of financial responsibility serves as security
hardrock minerals, stating: “[t]he board shall determine in
and is to be forfeited to the board to pay for any damages
advance the amount of royalty, never less than one-eighth in
caused by mining operations performed by the lessee.
kind, or in value, and a definite rental, increasing annually
(253.571).
after the first two years, upon lands not developed for oil or
Greater financial security amounts must be considered for
gas, or upon which no well has been commenced in good
mining operations planned for the waters of the state or under
faith to secure production in paying quantities of gas or oil.”
other particular circumstances that may pose the risk of
(253.53). Royalties are also to be reduced by deducting any
greater potential damages. (253.571).
oil or gas used in production, but again the provision would
appear applicable only to oil and gas production. (253.57.)
CRS-13
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Georgia
The State Properties Commission is authorized to permit
Georgia Surface Mining Act: GA. CODE ANN. §§ 12-4-70 et
exploration and to lease state lands for mineral development
seq. apply to all hardrock mined lands. (12-4-72). A permit
upon such terms and conditions as the Commission shall
to conduct surface mining operations is required and a
determine. (GA. CODE ANN. § 50-16-43).
reclamation and land use plan must be approved.
Operators must file a bond, unless the director of the
Rent and Royalties: Each lease must provide for a primary
Commission issues an exemption. If an operator is exempted
term of not more than ten years. Oil and gas royalties are
and subsequently violates rules/lease/plan terms, the director
specified, but not other minerals. The lease must provide for
may require bond submission. Bonds must be written by a
delay rentals in the sum of at least 10¢ per net mineral acre
director-approved and GA-licensed surety. In determining
payable on or before the first anniversary date of the lease,
bond amount, the director must consider the character and
25¢ per net mineral acre payable on or before the second
nature of the land reclamation requirements as approved in
anniversary date of the lease, 50¢ per net mineral acre
the plan. Amount cannot exceed $2,500 per acre. Bonds are
payable on or before the third anniversary date of the lease,
conditioned upon the faithful performance of the
and at least $ 1.00 per net mineral acre payable on or before
requirements law and regulations. Amount and reclamation
each subsequent anniversary date during the primary term of
requirements are to be reviewed at least every five years and
the lease. (50-16-43).
adjusted according to circumstances. (12-4-75).
Form: bond, government securities, cash, or any combination
thereof. (12-4-75).
Release & Forfeiture: Release occurs upon the director’s
determination that reclamation has been completed. Upon
failure to complete reclamation requirements, the state may
pursue forfeiture and reclaim lands with recovered funds.
(12-4-75).
CRS-14
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Hawaii
Any minerals on state lands may be leased by the Board of
State Land Bond requirement: HAW. REV. STAT. §§ 182-1
Land and Natural Resources. (HAW. REV. STAT. §§ 182-4,
et seq. Lessees must file with the Board a bond, in a form
182-5).
and in an amount approved by the Board. The bond must be
conditioned upon the faithful performance by the lessee of all
Leases are awarded at public auction at which bidders may
the lease terms and statutory requirements, and also
be required to bid on the amount of annual rental (to be
conditioned upon the full payment by the lessee of all
paid in advance, price based on an upset price fixed by the
damages suffered by the other land occupiers. (182-3).
board), and royalty, based on the gross proceeds or net
profits. (182-4, 182-9).
Strip Mine Reclamation: HAW. REV. STAT. §§ 181-1 et seq.
Specific royalties are set for each “long dry ton” of bauxite,
apply to all hardrock mined lands. The Board is empowered
bauxitic clay, gibbsite, diaspore, boehmite, and all ores of
to issue strip mine permits and to approve reclamation plans.
aluminum at the higher amount of either (1) twenty-five
Permits are accompanied by an annual fee based on number
cents or (2) the equivalent of the price of one pound of
of acres mined ranging from $100 for less than ten acres to
virgin pig aluminum. Royalties for ore processed into
$500 for one hundred acres. (181-4, 181-6).
aluminous oxide in the State are set at 80% of the rate of
A bond, conditioned on performance of reclamation
royalty for ore processed outside the State. Royalties must
requirements, must be filed. It generally must be signed by
also be set at a rate to encourage establishment and
HI licensed corporate surety. The amount will be set by the
continuation of the HI mining industry. (182-7).
Board, but cannot exceed $300 an acre. The amount is to be
adjusted to reflect any additional mined land or completed
reclamation. A surety’s signature is not required if a cash
deposit in the amount of the bond is made. (181-5).
Release occurs upon showing that land has been reclaimed as
required by law/regulation/permit terms. (181-5).
CRS-15
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Idaho
State lands are open to hardrock mineral “casual”
State Lands: Non-casual exploration requires a reclamation
exploration to the extent the Board of Land Commissioners
plan and a bond in such form as prescribed by the Board.
has not withdrawn lands. (IDAHO CODE §§ 47-702, 47-
The amount may not exceed $750 per affected acre. Bonds
1403).
are conditioned on the payment of all damages to the land
and resources thereon caused by the entry and/or exploration.
The Board may lease tracts (not exceeding six hundred forty
(IDAHO CODE § 47-703A).
acres) for prospecting and mining for an annual rental, not
less than $1 per acre per year, to be determined by the
Violations of responsibilities under law/regulations/leases
Board. The Board may set a production royalty as the
may result in a legal action for an injunction and to forfeit the
Board deems fair and in the interest of the state. Rental
operator’s bond and recover the cost of reasonable repair and
payments are deducted from royalties each year. (47-704,
reclamation. (47-718)
47-710).
Placer and Dredge Reclamation: IDAHO CODE §§ 47-1317
et seq. apply to all lands. Requires permit and bond in an
amount necessary to pay the estimated reasonable costs of
reclamation required under the permit for each acre of land to
be disturbed during the first season of operation plus 10%,
not to exceed $1,800 per acre. Bond amount must be
adjusted annually to reflect changes in conditions.
Exemption from bonding is possible if the applicant has
insured faithful performance of the requirements of the
reclamation act and regulations by having a current and valid
bond with the U.S. government, which equals or exceeds the
amount required by state law.
Form: surety, cash, certificate of deposit, or other bond
acceptable to the director. (47-1317).
CRS-16
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Idaho (cont.)
Release & Forfeiture: Release occurs upon termination of
mining operations and compliance with all reclamation
requirements. Failure to reclaim lands results in forfeiture
proceedings as required by sections 47-1318 and 47-1320.
Surface Mining Reclamation: IDAHO CODE §§ 47-1501 et
seq. apply to all lands. Requires approval of reclamation plan
and bond submission. Bond amount is to be determined by
Board (estimated reasonable costs of reclamation plus 10%).
Generally, bond amount may not exceed $2,500 per acre,
unless the Board holds a hearing, determines it is necessary,
and notifies operator. Bonds are not required if the operator
deposits cash and government securities in amounts equal to
that of the required bond. (47-1512.) The law also provides
for appropriate forfeiture proceedings. (47-1513).
CRS-17
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Illinois
State statutes do not appear to address leases, royalties, or
Abandoned Mined Lands and Water Reclamation Act: 20
rental fees for state-owned hardrock minerals.
ILL. COMP. STAT. 1920/1.01 et seq. generally apply to coal
mining, but contains non-coal reclamation provision. The
Department of Natural Resources is authorized and
empowered to fill or seal abandoned tunnels, shafts, and
entryways and remove equipment, structures, and facilities
which it determines could endanger life and property and
constitute a hazard. Annual expenditures cannot exceed 2%
of the Department’s annual budget for mine land reclamation
through 1999. All expenditures had to be made by 2001.
(1920/2.11)
Surface Mining Reclamation: 225 ILL. COMP. STAT. 715/1
et seq. Surface mining disturbing more than ten acres cannot
proceed without permit. (715/4). Financial security is
required, and must be adjusted in accordance with changes in
circumstances. (715/5). Bond amount must be between
$600 and $5,000 per acre as determined by the Director of the
Department. (715/8).
Form: as the Director prescribes or operator may deposit
cash, certificates of deposits, government securities, or
irrevocable letters of credit in an amount equal to bond
requirements. (715/8).
Forfeiture: procedures provided for by statute, forfeiture
fully satisfies reclamation obligations.
(715/11).
CRS-18
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Indiana
State may grant permits for extraction, removal, and
State Land Bond requirement: Permits must be
disposition of minerals on or under land or non-navigable
accompanied by sufficient bond in an amount to be
waters. (IND. CODE 14-35-1-1).
determined by the department for the restoration of land or
water disturbed by exploration and mining (IND. CODE 14-
Commercial production and accompanying royalty
35-1-10).
payments must be established by the end of the initial term.
(14-35-1-9).
Other reclamation statutes do not appear to apply to hardrock
mining operations.
Iowa
The state, counties, cities, and other political subdivisions
Reclamation: State law provides for reclamation of all lands
may lease public lands under their respective jurisdictions
affected by mining for gypsum, clay, stone, sand, gravel, or
for the purpose of metallic minerals exploration and
other ores or mineral solids, except coal. (IOWA CODE §
production.
208.1). Operations cannot begin without a license. (208.7).
Royalties are not specifically provided for; however, statutes
Bond: Permit application shall be accompanied by a bond or
indicate that revenues derived from the leasing of state-
security. (208.14). Bonds must be in a form prescribed by
owned lands are to be paid into the general fund of the state.
the state and conditioned on faithful performance by the
Revenues derived from the leasing of other public lands
operator of all reclamation requirements. Bonds must be
shall be paid into the general fund of the respective lessor
signed by the operator as principal and by a IA licensed
political subdivision. (IOWA CODE § 458A.21).
corporate surety. In lieu of a bond, the operator may deposit
cash or certificates of deposit subject to the same bond
conditions. Bond amount must be equal to the cost of
reclaiming the site as required under section 208.17 and as
estimated by the Division. (208.23).
A bond may not be released until required reclamation work
has been performed. (208.17). Forfeiture procedures are
provided under § 208.28. If the proceeds from bond
forfeiture are insufficient to satisfy the cost of reclamation,
the operator shall be liable for remaining costs. (208.28).
CRS-19
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Kansas
Various governmental entities agencies are authorized to
State Lease Liabilty: Lessee is liable for all surface damage
lease state lands under their jurisdiction for mineral
caused by any act or omission of the lessee. (KAN. STAT.
production, including the Board of County Commissioners
ANN. § 76-166).
of any county, the KS Board of Regents, and the Secretary
of the Department of Wildlife and Park Lands. (KAN. STAT.
Surface-mining Land Conservation and Reclamation Act:
ANN. §§ 19-110, 32-850, 75-52,136).
KAN. STAT. ANN. §§ 49-601 et seq. apply to surface mining
of hardrock minerals on all lands. Licensing is required and
must be renewed yearly. (49-605).
Board of County Commissioner and Board of Regent issued
leases require a royalty of not less than one eighth part of
A bond or security is required. Form: as prescribed by the
the produced minerals. County leases may provide for a
state; bond shall be signed by the operator as principal and by
payment to the county of the market value of such royalty in
a corporate surety licensed to do business in KS. Operators
lieu of payment in kind. (19-110, 32-850, 75-52,136).
may deposit cash, certificates of deposit, or government
securities subject to the same conditions as bonds, in lieu
thereof. Minimum bond amount is $250 per acre, and the
maximum is $1,500 per acre. States may waive or reduce the
amount to the extent that the operator has a sufficient bond or
security on file with the city or county where the site or
affected land is located. (49-615).
Forfeiture proceedings are provided for by statute. Forfeiture
of the operator’s bond fully satisfies all obligations of the
operator to reclaim affected land covered by the bond. (49-
619, 49-620).
CRS-20
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Kentucky
State statutes do not appear to address leases, royalties, or
Surface Coal Mining Regulation: KY. REV. STAT. ANN. §
rental fees for state-owned hardrock minerals.
350.010 et seq. Although generally inapplicable to hardrock
minerals, the statute does authorize some regulation of “strip
mining,” which is defined in a manner that would appear to
include hardrock minerals. Certain provisions are arguably
applicable to noncoal strip mined land. (See 350.050,
350.152, 350.445).
CRS-21
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Louisiana
The State Mineral Board is authorized to lease minerals for
State statutes do not appear to address reclamation for
development and production on any lands belonging to the
hardrock mineral mines.
state. (LA. REV. STAT. ANN. §§ 30:124, 30:152).
Minimum royalties must be stipulated in the lease, and
royalties for various minerals are specified. Hardrock
minerals are covered by the general provision requiring one-
eighth of all minerals produced and saved; or if the lease is
on behalf of a School Board, one-sixth of all minerals
produced and saved. The state may choose to take any
royalty in kind. (30:127, 30:142). The state may remit 10%
of all royalties to the parish where production occurs.
(30:145).
Where a lease provides for delay rental, the annual rental
shall not be for less than one-half the cash bonus. (30:127).
Proceeds from mineral royalties, leases, and any bonuses
are to be paid into the Bond Security and Redemption Fund,
and when it is fully funded, into the Louisiana Investment
Fund for Enhancement. (30:136.1).
CRS-22
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Maine
The Bureau of Geology and Natural Areas and other
State Lands Bond: Lessees are required to provide a bond in
agencies with jurisdiction over state-owned lands have
an amount necessary to reclaim the area mined and to protect
jurisdiction for the purpose of mineral development and
against damage to any property located outside the leased
mining on that land. (ME. REV. STAT. ANN. tit.12 § 549).
area caused by the mining operations. The amount is
determined by the director of the agency with jurisdiction
over the state lands. In lieu of a bond, other security may be
Exploration permits are required, at which point claims may
provided so long as determined by the relevant agency
be located. Rental fees are levied when an exploration
director to provide the same protection as a bond. (ME. REV.
claim is recorded, increasing each year as follows:
STAT. ANN. tit. 12 § 549-B).
First year $ .25 per acre
2nd year $ .75 per acre
Reclamation: Applicable to all lands. Mining activities
3rd year $ 1.50 per acre
require a reclamation plan for the maintenance of the mine
site during mining and for a period after termination of
4th year $ 2.50 per acre
mining. Security is required for metallic ore mining to
5th year $ 5.00 per acre
ensure reclamation, closure, and postclosure care
6th year $20.00 per acre
maintenance requirements are met. Form: a bond payable to
the State or other satisfactory forms, including a security
7th year $30.00 per acre
deposit with the State, an escrow account and agreement,
Leases are available to persons with a valid recorded
insurance, or an irrevocable trust. Amount is determined by
exploration claim. Lessees must make royalty payments
considering the character of the overburden, the future
annually or more frequently as specified in the lease; the
suitable use of the land involved and the cost of grading and
amount of royalty payments is set jointly by the director
reclamation to be required. Forfeited security must be
Bureau of Geology and Natural Areas and the director of the
expended for the reclamation of the area subject to the bond.
agency having jurisdiction over the state lands. The royalty
(ME. REV. STAT. ANN. tit. 38 § 490).
rate set must reasonably relate to applicable royalty rates
generally prevailing. (549-B).
CRS-23
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Maryland
State statutes do not appear to address leases, royalties, or
Surface Mining Reclamation: MD. CODE ANN., ENVIR. §§
rental fees for state-owned hardrock minerals.
15-801 et seq. apply to hardrock minerals on all lands. The
law establishes a Reclamation Fund for carrying out purposes
of the act and to reclaim lands affected prior to enactment of
the law. (15-805). A license and surface mining permit are
required before operations may begin. Applications for these
must be accompanied by submission of a reclamation plan
along with various fees based on the number of acres
affected. (15-807, 15-808).
Bonds must be filed prior to commencement of operations.
Amount: maximum of $1,250 per affected acre, but not less
than a total of $8,000. The Department of the Environment
may make adjustments if the bond fee is unreasonable and
excessive upon consideration of the size of the operation, the
amount of land to be mined, the acreage that is unreclaimed
at any one time, the proposed method of regrading and
revegetation of the site, the proposed use of the land after
reclamation, and any other relevant factors. Liability under
the bond extends throughout operations and for five years
after its expiration unless the bond is released. (15-823).
Release is authorized upon completion of operations and
reclamation and may be incremental. (15-824). Forfeiture
occurs on failure to perform reclamation in accordance with
plan under procedures provided for by statute. (15-825).
CRS-24
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Massachusetts
The Division of Mineral Resources, within the Department
Bond: A licensee or lessee must keep the state indemnified
of Environmental Protection, administers all laws and
against all claims and costs in relation to the license or lease
regulations pertaining to hardrock mining on state lands.
by posting a bond satisfactory to the director. No extraction
The Division has authority to license exploration, lease
can occur until the bond is posted. (MASS. GEN. LAWS ch.
minerals for extraction, and set charges and fees for mining
21, § 54).
operations. Leases may not be issued until the Dep’t has
received reliable information on the quantities, quality, and
location of the resources, as well as potential impacts on
Additional reclamation laws are not applicable to noncoal
natural resources. (MASS. GEN. LAWS ch. 21, § 54).
minerals. (MASS. GEN. LAWS ch. 21B, § 2).
CRS-25
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Michigan
There would not appear to be a generally applicable law
Ferrous Metallic Mine Reclamation: MICH. COMP. LAWS
governing leasing on state-owned lands. However, state-
§§ 324.63101 et seq. apply to all lands. A permit is required
owned unpatented overflowed lands, made lands, and lake
before operations may begin. Permits require submission of
bottomlands are subject to lease for the removal of “metallic
mining and reclamation plan. (324.63103a). Security may be
minerals, marl, stone, rock, sand, gravel, earth, oil, and gas”
required if the supervisor of reclamation has reasonable
from or under the beds thereof. Leases may include such
doubts about an operator’s ability to perform reclamation.
consideration as may be considered fair and reasonable.
Security may be a performance bond or other satisfactory
Special leasing rules apply to lands adjacent to and
form of financial assurance. (324.63107).
underlying the Great Lakes. (MICH. COMP. LAWS §§
324.33936, 324.33938).
Nonferrous Metallic Mine Reclamation: MICH. COMP.
LAWS §§ 324.63201 et seq. apply to all lands. A permit is
required before operations may begin, as is an environmental
impact assessment for the proposed mining operation. These
require preparation of a mining, reclamation, and
environmental protection plan. Operators must maintain
financial assurance until the Dep’t determines reclamation is
complete. Form: a conformance bond, escrow, cash,
certificate of deposit, irrevocable letter of credit, or other
equivalent security, or any combination thereof, covering at
least 75% of the total required amount; the balance of the
required total amount, if any, shall consist of a statement of
financial responsibility. Assurance amount must be sufficient
to cover the cost to administer reclamation. Amounts shall be
adjusted every three years or as the Dep’t deems necessary.
CRS-26
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Minnesota
The commissioner of natural resources may designate state
Mined Land Reclamation: MINN. STAT. §§ 93.44 et seq.
lands as mining units and execute leases to prospect for
apply to metallic minerals on all lands. A permit to mine for
“iron ore and other ores.” Generally, leases may cover only
metallic minerals is required prior to operations.
one mining unit. (MINN. STAT. §§ 93.14, 93.15).
Applications must include a proposed plan for reclamation or
restoration, or both.
Lease form is provided by statute, and incorporates
Financial Assurance: A bond or other financial assurance
minimum royalty rates. Increases to royalty rates are
satisfactory to the commissioner is required and must be
provided for by equations referencing the Producer Price
reviewed annually. Operators must also supply a certificate
Index for Iron Ores and the Iron and Steel Subgroup of the
showing the applicant has a public liability insurance policy
Metals and Metal Products Group. Base royalty rates are set
in force for the mining operation or evidence that the
for various categories of ores, ranging from $.11 to $.18 per
applicant has satisfied other state or federal self-insurance
ton. (93.20)
requirements. Insurance must cover personal injury and
property damage. (93.481, 93.49).
Rental for state lands is $1,250 for the first year after the
date of the lease and $5,000 per year for the remainder of
the term; provided, that for a taconite iron ore mining lease
the rent is set at $400 per year for the first five years and
$1,600 per year thereafter. (93.20).
CRS-27
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Mississippi
The Mississippi Major Economic Impact Authority may
Mississippi Surface Mining and Reclamation Act: MISS.
lease state owned lands for mineral development for such
CODE ANN. §§ 53-7-1 et seq. apply to surface mining on all
consideration and upon such terms and conditions as it
lands. The Mississippi Commission on Environmental
deems just and proper. (MISS. CODE ANN. §§ 29-7-1 et
Quality Permit Board may issue surface mining permits. A
seq.) Certain types of lands, including designated offshore
reclamation plan must also be submitted. Reclamation must
tracts, are not subject to lease.
be consistent with local, physical, environmental, and
climatological conditions and current mining and reclamation
technology. The Board may, in its discretion, authorize the
Royalties to the state must be at least three-sixteenths of oil
reclamation of non-permit lands in lieu of the lands included
and gas or other minerals.
in the permit application. (53-7-31).
Operators must submit a performance bond in an amount
sufficient to properly reclaim the permit area, but not less
than $500 nor more than $2,500 per acre. No bond will be
required if mining is funded by Mississippi Department of
Transportation or the Division of State Aid Road
Construction and the operator has submitted a bond to one of
those entities. (53-7-23). Form: bonds must be executed by
the applicant and a state-licensed corporate surety; in lieu of
the surety bond cash, negotiable U.S./MS bonds, assignment
of real property, personal property, or savings account,
negotiable certificates of deposit, or a letter of credit of a
qualified bank are acceptable. Bond amount may be
adjusted to reflect changed circumstances. (53-7-37).
CRS-28
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Mississippi (cont.)
Forfeiture proceedings must be conducted in accordance
with section 49-17-31 through 49-17-41 and may be pursued
when the commission finds that (i) reclamation of the
affected area is not proceeding in accordance with the plan
and the operator fails to take the required corrective action, or
(ii) revegetation has not been completed in conformance with
the plan within two years or longer, or upon revocation of a
permit. (53-7-35).
Upon completion of operations, the operator may file for the
release of the performance bond or deposit. The application
must describe of the results achieved in accordance with the
operator’s reclamation plan. The Dep’t and state water
authorities must then inspect the site. Release may occur,
incrementally or in whole, upon Permit Board’s satisfaction
with reclamation performance. (53-7-67).
CRS-29
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Missouri
State statutes do not appear to address leases, royalties, or
Metallic Mineral Waste Management Act: MO. ANN.
rental fees for state-owned hardrock minerals.
STAT. §§ 444.350 et seq. apply to all lands. The director of
the Department of Natural Resources coordinates all
environmental regulation and oversees the permitting
process. Permitting requires submission of a closure plan and
inspection-maintenance plan that provide for compliance with
applicable water pollutant discharge permits, dam safety
registration requirements, waste management program
requirements, and air pollution control regulations. Plans
must be reviewed every five years and updated as necessary.
(444.362, 444.365).
Financial assurance is required before a permit will issue.
Form: bond, certificate of deposit, letter of credit, insurance,
company guarantee, escrow agreement or other form of
financial assurance as approved by the director. Amount:
generally $1,000 per acre or fraction thereof, subject to
director discretion, but not less than $20,000 per permit.
Once the director determines that reclamation has been
completed for any area, the financial assurance must be
released or reduced proportionately. Forfeiture procedures
are provided by law, requiring written notice of violations
and a 90-day period for corrective measures. (444.368,
444.378).
CRS-30
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Missouri (cont.)
Land Reclamation Act: MO. ANN. STAT. §§ 444.760 et seq.
apply on all lands to surface mining for minerals other than
iron, lead, zinc, gold, silver, coal, surface or subsurface water,
fill dirt, natural oil or gas together with other chemicals
recovered therewith. (444.765). Covered operations require
permit from the Land Reclamation Commission.
Bonds must be filed with the Commission and signed by a
surety. In lieu of surety bond, the operator may furnish a
bond secured by a personal certificate of deposit or
irrevocable letter of credit. Amount: $8,000 per permit up to
eight acres and $500 for each acre thereafter. An additional
bond of $4,500 per acre is required when topsoil will be
removed. (444.778). Bonds are retained until the
Commission is satisfied that operators have (1) complied
with applicable regulations and plans and (2) begun operation
of a sanitary land fill or solid waste disposal area. (444.770).
Release procedures are provided by statute (444.775).
CRS-31
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Montana
Mineral Leases on State Lands: MONT. CODE ANN. §§ 77-
Hardrock Mining Impact Regulation: MONT. CODE ANN.
3-101 et seq. The board of Land Commissioners may lease
§§ 90-6-301 et seq. The Hardrock Mining Impact Board is
state lands, including submerged lands, for the purpose of
authorized to regulate certain aspects of hardrock mining on
prospecting for or mining metalliferous minerals or gems.
all lands. Applicants for mining permits must submit an
The term of the lease and any applicable limitations are to
impact plan describing economic effects of mining
be determined by the Board. (77-3-102). Before issuance
operations. Upon approval of the plan, developers may make
of any lease, the department must investigate the character
payments as specified in the plan directly to a local
of the lands and mineral deposits to determine if mining is
government unit or to the board to be deposited into an
appropriate and to determine the royalty and rental amounts.
impact fund for use in implementing the plan. Local
(77-3-112).
governments may also enter into agreements with developers
for the issuance of any special industrial local government
facility impact bonds to provide for the construction,
The Board may require rental payment “in conjunction with
renovation, improvement, or acquisition of local government
the work requirements” or “cash rentals as an alternative or
facilities resulting from the large-scale mineral development.
otherwise.” (77-3-115).
(90-6-310).
Leases are to specify applicable royalties. Royalties, along
Metal Mine Reclamation: MONT. CODE ANN. §§ 82-4-301
with all other considerations, must constitute the “full
et seq. apply to mines for any ore, rock, or substance, other
market value” of the conveyed leasehold. In no case will
than oil, gas, bentonite, clay, coal, sand, gravel, peat, soil
royalties be less than 5% of the returns from or of the full
materials, or uranium on all lands. General exemptions for
market value of the recovered metalliferous minerals or
small miners are provided, although special bonding
gems. (77-3-106). Bonds to cover royalty payments or to
requirements apply to placer or dredge mining (equal to state
protect other state land lessees/purchasers may also be
estimate for reclamation, but not to exceed $10,000). (82-4-
required. (77-3-119, 77-3-120).
305). Exemptions for small scale activities are also allowed,
although such operations cannot generally use mercury,
cyanide, or leaching chemicals. (82-4-310).
CRS-32
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Montana (cont.)
Exploration licenses and operation permits are also required,
each of which must be accompanied by a reclamation plan. A
plan must be developed for each operation with specific
requirements regarding erosion control, water issues,
pollutants, vegetative cover, and other issues. (82-4-332).
Adequate performance bonds are also required. Form:
bond, cash deposit, an assignment of a certificate of deposit,
an irrevocable letter of credit, or other surety acceptable to
the department. Bond amount covering reclamation costs
must be filed, and may not be less than $200 per acre. The
amount is subject to review annually and extensive review
every five years. The Dep’t may modify bond amounts to
account for changed circumstances. (82-4-338).
Forfeiture of the bond may be had to abate public dangers at
the operation site. (82-4-338). Forfeiture for failure to reclaim
lands and release of bonds for successfully reclaimed lands
are provided for under § 82-4-341.
Nebraska
Development of Mineral Lands: NEB. REV. STAT. §§ 72-
State statutes do not appear to address reclamation for
301 et seq. All state owned lands are open to mineral
hardrock mineral mines.
development. Lease terms shall not exceed three years.
(72-303).
The lease must provide for a royalty that is not less than 5%
of production. An additional rent may be charged as
determined by the Board of Educational Lands and Funds.
(72-308).
CRS-33
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Nevada
State law provides for coal, oil, gas, and geothermal leases
State reclamation law is applicable to all minerals. A
of state lands, but does not appear to address hardrock
permit is required before any mining operation can
minerals specifically. General lease provisions authorize the
commence. Reclamation plans must provide for vegetative
administrator of the Division of State Lands to lease lands
cover and land reclamation to an extent comparable to
subject to terms and conditions deemed appropriate. (NEV.
adjacent areas. Reclamation should be performed
REV. STAT. §§ 322.010-322.075).
simultaneously with operations or promptly upon completion
or abandonment of operations. (NEV. REV. STAT. §§
519A.210, 519A.160).
An applicant must agree in writing to be responsible for all
reclamation and must file a bond or other surety in a form
and amount approved by the Division and as required by its
regulations. (519A.210, 519A.160).
Bond forfeiture procedures are provided for by statute.
(519A.270, 519A.280).
CRS-34
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
New Hampshire
The Commissioner of the Department of Resources and
Reclamation: The Commissioner is directed to review all
Economic Development is directed to make
mining permits applications and may deny permits if the
recommendations to the Long Range Capital Planning and
operation will not comply with reclamation laws, the impact
Utilization Committee in accordance with state law
will be too great or is in an area unsuitable for mining
requiring Committee and governor review prior to lease or
because of historical, archaeological or environmental
disposal of state land (N.H. REV. STAT. §§ 12-E:9, 4:40).
reasons, or the reclamation plans or pollution prevention
The Commissioner is authorized to issue mineral
measures are insufficient. (N.H. REV. STAT. § 12-E:2).
prospecting permits and to determine lease terms, including
Permit applications must include a reclamation plan, and
“the amount of acreage, duration of lease, rental cost,
permits may be modified and subjected to new conditions as
royalties and any conditions concerning extraction of
the Director deems necessary, consistent with promulgated
minerals or reclamation of the leased land ....” (12-E:9).
regulations.
Upon approval of a plan, a bond or other security satisfactory
to the commissioner must be filed with the state. Bond
amount is to be the estimated cost of reclamation based on
the future suitable use of the land, but in no case shall the
bond be less than $1,000 per acre. Amounts are to be
reviewed and adjusted at least every three years. Bonds may
be released, in whole or in part, upon reclamation
performance to the satisfaction of the Commissioner and in
no case sooner than three years from its filing. (12-E:6).
New Jersey
State statutes do not appear to address leases, royalties, or
State statutes do not appear to address reclamation for
rental fees for state-owned hardrock minerals.
hardrock mineral mines.
CRS-35
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
New Mexico
The Commissioner of Public Lands may issue leases for
Bonds for State Leases: Lessees may be required to file a
hardrock minerals on state lands. (N. M. STAT. ANN. § 19-
bond or undertaking of not less than $5,000 for the benefit of
8-24).
any surface lessee, patentee or contract purchaser, to secure
against damage to livestock, water, crops or other tangible
land improvements. A blanket bond of not less than $10,000
Annual rental is required for all leases, to be paid in
for holders of multiple leases may be filed instead. Bond
advance, in an amount fixed by the Commissioner. Rent
requirement may be waived by holder of surface rights. (N.
may not be less than five cents per acre for the primary term
M. STAT. ANN. § 19-8-24).
nor less than fifty cents per acre for the secondary term; total
annual rental per lease may not be less than $10. (19-8-21).
New Mexico Mining Act: N. M. STAT. ANN. §§ 69-36-1 et
seq. generally govern reclamation of all lands mined for
Royalties are required for all leases and generally may not
hardrock minerals and apply to all processes of obtaining
be less than 2% of gross returns from all ores or materials
useful minerals “from the earth’s crust or from previously
mined and extracted from the land. Additional royalties: not
disposed or abandoned mining wastes, including exploration,
less than 2% of premiums and bonuses received; not less
open-cut mining and surface operation, the disposal of refuse
than 5% on production bonuses and premiums for deposits
from underground and in situ mining, mineral transportation,
of rare earths, precious or semi-precious stones, uranium,
concentrating, milling, evaporation, leaching and other
thorium, plutonium or any other materials determined to be
processing.” (69-36-3). The State Mining Commission is
needed for the production of fissionable materials; special
responsible for regulating mining operations under the act
rental and royalty rates for nonproducing leases; and special
and is required to establish permit and reclamation
rates for potassium, sodium, phosphorus and “other minerals
requirements incorporating site-specific characteristics. (69-
of similar occurrence and their salts ....” (19-8-21, 19-8-24).
36-12). Operations and reclamation requirements must (1)
use the most appropriate technology and the best
management practices; (2) assure protection of human health
and safety, the environment, wildlife and domestic animals;
CRS-36
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
New Mexico
(3) include backfilling or partial backfilling when necessary;
(cont.)
(4) generally require permit areas that will achieve a “self-
sustaining ecosystem appropriate for the life zone of the
surrounding areas following closure”; (5) be designed to
reduce the formation of acid and other toxic drainage; (6)
require that nonpoint surface releases of toxic substances be
contained within the permit area; (7) require facilities to be
designed to facilitate contemporaneous reclamation; and (8)
preserve topsoil in a usable condition for sustaining
vegetation. (69-36-7).
The statute requires financial assurance. The amount must
be sufficient to assure completion of performance
requirements if the work must be performed by the state or a
third party contractor. Amount is subject to periodic review
to account for inflation or other reclamation cost changes.
Financial requirements must not duplicate nor be less
comprehensive than federal financial requirements. Financial
assurance cannot be any type or variety of self-guarantee or
self-insurance. (69-36-7).
Release will occur upon a permittee’s application and
commission inspection of the site, and may be incremental.
Release of amounts for revegetation is subject to additional
requirements. (69-36-7).
CRS-37
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
New York
The Commissioner of General Services may issue a permit,
The New York State Mined Land Reclamtion Law: N.Y.
consent, or lease to enter upon state lands to explore for
ENVTL. CONSERV. LAW §§ 23-2701 et seq. apply to all
minerals, work mines, and extract minerals. For
minerals on all lands. The Department of Environmental
appropriated state lands, the state entity with jurisdiction
Conservation regulates reclamation and is authorized to
over such lands is entitled to notice from the commissioner
establish environmental standards and criteria for mining and
of any mining application and shall have a period of not less
reclamation of the affected land and to permit mining and
than thirty days to report in writing to the Commissioner.
reclamation activities. (23-2709.) A mining permit governs
(N.Y. PUB. LANDS LAW §§ 81, 83).
certain aspects of operations and must be accompanied by a
“mined land-use plan,” which governs mining and
reclamation activities. (23-2713.)
Annual rental and royalties are to be set by the
Commissioner at a reasonable and proper rate. The
Financial security in the form of a bond signed by a
minimum royalty cannot be less than 2% of the market
qualified surety (or other form accepted by the Dep’t) is
value of all minerals. Royalty payments are made semi-
required and must be sufficient to ensure performance of
annually. (82).
applicable reclamation requirements. The Dep’t determines
the amount, conditions and terms of the security. It must
generally remain in force until reclamation is complete,
although incremental release is authorized. (23-2715.)
CRS-38
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
North Carolina
The State, acting at the request of the Department of
The Mining Act of 1971: N.C. GEN. STAT. §§ 74-46 et seq.
Environment and Natural Resources, may sell, lease, or
govern reclamation of surface effects of hardrock mining
otherwise dispose mineral deposits on submerged lands.
operations on all lands. A permit from the Department of
(N.C. GEN. STAT. § 146-8).
Environment and Natural Resources is required before
mining can commence. Permits require a reclamation plan,
with specific requirements as to erosion, revegetation, and
The Department of Administration may sell, lease, or
reclamation time frames. (74-49, 74-53).
otherwise dispose of mineral rights or deposits in the vacant
and unappropriated lands, swamplands, and lands acquired
Permits will not become effective until an applicant has
by the State by virtue of being sold for taxes (but not
submitted an acceptable performance bond or other security
submerged lands), for such consideration, in such portions,
(74-50, 74-54). Bond amount must be set by the Dep’t and
and upon such terms as are deemed proper by the
is based on the area to be reclaimed under the approved
Department and approved by the Governor and Council of
reclamation plan(s) to which the bond pertains, less any area
State. (146-9).
where reclamation has been completed and released, pursuant
to § 74-56. Alternative forms: cash deposit, an irrevocable
letter of credit, a guaranty of payment from an acceptable
bank, an assignment of a savings account in an acceptable
bank on an assignment form prescribed by the Department, or
other security acceptable to the Department. (74-56, 74-59).
Bond release and forfeiture procedures are also provided by
statute. (74-56, 74-59).
North Dakota
The state may issue prospecting permits or leases for the
Abandoned Surface Mine Reclamation: N.D. CENT. CODE
purpose of prospecting for and mining minerals contained in
§§ 38-14.2-01 et seq. apply to all lands mined for noncoal
state lands. (N.D. CENT. CODE §§ 38-11-01, 38-11-02).
minerals. The Public Service Commission is authorized to
develop a reclamation plan for abandoned mine sites. The
law creates an abandoned mine fund, from which moneys
may be used to reclaim lands to protect against subsidence,
erosion and sedimentation, and water pollution, among other
things. (38-14.2-04).
CRS-39
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Ohio
Various entities are authorized to issue mining permits and
Noncoal Surface Mining Regulation: OHIO REV. CODE
leases for state lands. The director of natural resources is
ANN. §§ 1514.01 et seq. apply to hardrock mining operations
responsible for the bed of Lake Erie. (OHIO REV. CODE
on all lands. A permit from the Division of Mineral
ANN. § 1505.07). The chief of the Division of Water is
Resources Management is required for surface mining
responsible for canal lands. (1520.02). The chief Division
operations. Permit applications must include a plan of
of Wildlife is responsible leasing of lands under the
reclamation, which must provide for various environmental
division’s jurisdiction. (1531.06). Finally, counties,
standards, including reclamation adequate for the land’s
townships, and boards of education are authorized to lease
intended future uses, soil stability and erosion protections,
minerals on lands under their authority. (307.11, 505.11,
revegetation, removal of unwanted structures, and prevention
3313.45).
of water contamination. (1514.02).
Applicants must also provide proof of adequate liability
Consideration for such leases shall be on a royalty or rental
insurance, various filing fees, and a performance bond.
basis, as determined by the relevant entity.
(1514.02). The performance bond may take the form of a
surety bond, cash, an irrevocable letter of credit, or
certificates of deposit. Amount: Unless otherwise provided

by rule, $10,000 plus $1,000 per acre. (1514.04).
CRS-40
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Oklahoma
The Commissioners of the Land Office are authorized to
The Mining Lands Reclamation Act: OKLA. STAT. tit. 45,
offer mineral leases for sale through competitive bids.
§§ 721 et seq. apply to all lands. Operators must obtain a
(OKLA. STAT. tit. 64, § 454).
permit from the Department of Mines for each mining
operation. Permit applications are to be accompanied by a
plan of reclamation, which must, among other things, set
Leases require an annual rental of not less than $1 per acre,
forth the proposed use to be made of the affected land, the
or if minerals are produced, a royalty not less than 5% of
grading to be accomplished, the type of revegetation, and an
the gross receipts from sale of minerals produced. If the
approximate time frame for such efforts.
minerals are not sold, a royalty of 5% of the market value of
the minerals produced may be elected by the
A bond to cover reclamation requirements must be filed as
Commissioners. The Commissioners are to require a bond
required by the Director of the Dep’t of Mines. Form: Bonds
sufficient for the faithful performance of all lease
shall be co-signed by the operator as principal and by a “good
requirements. (455).
and sufficient corporate surety,” or operators may deposit
cash government securities, certificates of deposit or an
irrevocable letter of credit, or by using existing reclaimed
The Department of Central Services is authorized to lease
areas in excess of cumulative reclamation requirements.
minerals on lands under its jurisdiction upon a basis of a
Bond amount is to be determined by the Dep’t based on
retained royalty of not less than 1/8 of all minerals
permit performance requirements and consideration of the
produced and such additional cash bonus as may be
character and nature of the overburden, the future suitable
procured. (OKLA. STAT. tit. 74, § 107).
land use, and the cost of reclamation to be required.
Minimum: $2,000. Withdrawals of land from permit or
amendments to permit must be reflected in bond amount.
(724). Financial surety must remain in effect until the land
has been reclaimed and released by the Dept in accordance
with 45 Okl.St.Ann. §§ 728 and 729.
CRS-41
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Oregon
The Department of State Lands is authorized to issue
Reclamation of Surface-Mined Lands: OR. REV. STAT. §§
mineral leases and also appears to have authority to fix
517.702 to 517.951. apply to all lands. Operators cannot
terms, conditions, and royalties (as provided in § 274.530).
engage in surface mining without a permit from the State
(OR. REV. STAT. §§ 273.225, 273.551).
Department of Geology and Mineral Industries for each
operation. (517.790). Additional permit requirements and
more stringent review of certain reclamation issues are
applicable to nonaggregate mineral mines. (517.915).
Permits require a bond or security acceptable to the Dep’t.
The amount is to be determined by the Dep’t, but may not
exceed the total cost for reclamation (if performed by the
state) or, generally, $10,000 per acre. Amount is to be
calculated and adjusted based upon the total area expected to
be in a disturbed condition in the following year. (517.810).
Amount can be increased to the lower of actual cost of
reclamation or $100,000 per acre if specified threats may be
present. (517.950). The state must also provide a pooling
program to assist operators in complying with bonding
requirements. (517.815).
Release and adjustment are to be performed in accordance
with § 517.870.
CRS-42
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Pennsylvania
State statutes do not appear to address leases, rental fees, or
Noncoal Surface Mining Conservation and Reclamation
royalties for hardrock minerals on state lands.
Act: 52 PA. CONS. STAT. §§ 3301 et seq. apply to hardrock
mining on all lands. The Department of Environmental
Resources may issue an operating permit. Applicants must
also submit a complete and detailed plan for the reclamation
of the affected land. (3307).
Applicants must file a bond for the land affected by each
operation. The amount is to be the total estimated cost to the
state of completing the reclamation plan or an amount
established by the Dep’t under regulations for an alternate
bonding program. The minimum amount is $5,000 per
permit area. Liability under the bond is for the duration of
surface mining and a period of five years after reclamation
work, unless the bond is released. Alternative bond forms are
provided (e.g. irrevocable bank letters of credit, cash) and
self-bond may be accepted. Stricter bonding requirements are
applicable when overburden produced will exceed specified
levels.
Forfeiture proceedings are provided for by statute. (3309).
Rhode Island
State statutes do not appear to address leases, rental fees, or
State statutes do not appear to address reclamation or bonding
royalties for hardrock minerals on state lands.
requirements for hardrock mining operations.
CRS-43
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
South Carolina
The Public Service Authority may issue mineral leases on
South Carolina Mining Act: S.C. CODE ANN. §§ 48-20-10
lands owned by the Authority; the State Budget and Control
et seq. apply to all lands. South Carolina Department of
Board and county forfeited land commissions may, with the
Health and Environmental Control may issue certificates of
approval of the Attorney General, issue leases on state
exploration and operating permits. Both must be
lands/waters under the ownership, management or control of
accompanied by a reclamation plan. The basic objective of
the Board or commissions, respectively. (S.C. CODE ANN.
reclamation is to “establish on a continuing basis the
§§ 10-9-10, 10-9-30)..
vegetative cover, soil stability, water conditions, and safety
conditions appropriate to the area.” (48-20-50, 48-20-60, 48-
20-90).
Adequate bonding is also required. The Dep’t sets the
amount of the performance bond or other security within
statutory limits: for exploration, bonds must be $2,500; for
operations, bonds must be based on affected land. Less than
10 acres: $10,000. Between 10 and 15 acres: $15,000. 15
acres or more: $25,000. Over 25 acres: may be in excess of
$25,000. (48-20-70, 48-20-110). Bonds must be signed by a
surety approved by the Department of Insurance or be an
acceptable alternative form: cash deposit, registered securities
acceptable to the department, an assignment of a savings
account in a SC bank, or other securities acceptable to the
department. (48-20-110).
Release must be done pursuant to section 48-20-130.
Forfeiture is ordered pursuant to section 48-20-170.
CRS-44
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
South Dakota
The Commissioner of School and Public Lands may lease
South Dakota Mined Land Reclamation Act: S.D.
mineral interests owned by the state, although for leases on
CODIFIED LAWS §§ 45-6B-1 et seq. apply to noncoal minerals
lands administered by the Department of Game, Fish and
on all lands. The Board of Minerals and Environment may
Parks, the consent of the department is a prerequisite. (S.D.
issue permits for operations. Permit applications must
CODIFIED LAWS § 5-7-1).
include a reclamation plan and post-closure plan for mine
waste disposal facilities. (45-6B-7). Reclamation is to be
reasonably designed to minimize the disruption from the
Annual rentals are required. They must be paid in advance
mining operation and to rehabilitate affected plant cover, soil
in an amount to be fixed by the Commissioner. Rental may
stability, water and other resources.
not be less than $1 per acre for the primary term, nor less
than $2 per acre for the secondary term. The annual rental
Bonding is required. Generally, the amount is to be set by
for any one lease may not be less than $10. (5-7-54).
the Board based on a site inspection, the reclamation plan,
and “the magnitude, type, and costs of reclamation activities
planned for the affected land and the nature, extent, and
Royalties are required. They may not be less than 2% of the
duration of the mining.” The amount must be sufficient to
gross returns from the sale of ores and mineral products, less
cover reclamation costs and may be adjusted over time, as
reasonable transportation, smelting, reduction, or other
necessary (45-6B-21, 45-6B-26, 45-6B-27). If cyanide or
customary charges, as determined by the Commissioner. An
another leaching agent is used, additional assurance (at least
additional royalty of not less than 2% of any premiums and
$25,000 but not more than $500,000) may be required. (45-
bonuses received in connection with the discovery,
6B-20.1). Form may be as required by the Board; cash or
production or marketing is also required. (5-7-55).
government securities are acceptable. (45-6B-20, 45-6B-23).
Additional assurance may be insurance, cash, company net
worth, or as required by the Board. (45-6B-20.1).
A bond to secure surface lessees, patentees, or contract
Forfeiture and Release proceedings are provided for. (45-
purchasers against damage to livestock, water, crops, or
6B-25, 45-6B-66 - 45-6B-68).
other tangible land improvements caused by the mining
lessee may also be required. (5-7-57).
CRS-45
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Tennessee
The Governor of the state may lease any of the property
Tennessee Mineral Surface Mining Law of 1972: TENN.
owned by the state at a reasonable rental or royalty in order
CODE ANN. §§ 59-8-201 et seq. apply to hardrock mining on
that mineral resources may be properly developed. (TENN.
all lands. The Commissioner of Environment and
CODE ANN. § 12-2-101).
Conservation may issue operations permits. Permits are
conditioned upon approval of a bond as provided in § 59-8-
207 and a mining and reclamation plan as provided in § 59-8-
208.
Bonds must be executed by the operator and a qualified
corporate surety approved by the Commissioner. Additional
acceptable forms of security are: cash, negotiable U.S.
treasury bonds, or negotiable general obligation municipal or
corporate bonds with at least an “A” rating by Moodys and/or
Standard and Poors. (59-8-207). Bond amount shall not be
less than $600 per acre or fraction thereof. The amount shall
be increased or decreased to account for any change in the
acreage covered by the permit as provided in § 59-8-
205(a)(2).
Forfeiture procedures are provided by § 59-8-211.
CRS-46
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Texas
Any tract of land that belongs to the state, including
Texas Surface Coal Mining and Reclamation Act: TEX.
submerged lands, and land sold with a reservation of
NAT. RES. CODE ANN. §§ 134.001 et seq. primarily address
minerals to the state are subject to prospect by any person
coal mine regulation, but also govern “iron ore and iron ore
for those minerals. (TEX. NAT. RES. CODE ANN. § 53.011).
gravel mining and reclamation operations to the extent [they]
can be made applicable” on all lands. (134.012). The
Railroad Commission of Texas is given jurisdiction over
The General Land Office may issue a prospecting permit for
mining and reclamation. A reclamation plan is required for
a one year period. Rent at an amount set by the
surface mined land and for the surface effects of underground
Commissioner is required. Payment extends a permit for
mining. (134.015, 134.041).
one year; a permit cannot be extended for more than five
years. (53.013).
A performance bond is required. The form is to be
determined by the Commission, although self-insurance or
compliance with an alternative system may be allowable.
A prospecting permittee may file an application to lease an
Acceptable forms include cash, negotiable U.S./TX bonds, or
area covered by its permit for mining purposes. (53.015).
negotiable certificates of deposit. (134.123, 134.124,
The royalty under the lease may not be less than 1/16 of the
134.126). The Commission is to determine the security
value of the minerals produced under the lease. (53.018).
amount based on estimated reclamation needs; it may not be
less than $10,000 per permit area. Additional bonds may be
required to cover a succeeding increment of mining in the
permit area. (134.121, 134.122).
Release of Bond or Deposit is governed by section 134.131.
CRS-47
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Utah
Mineral leases of all state lands, except school and
Utah Mined Land Reclamation Act: UTAH CODE ANN. §§
institutional trust lands, are made through the Division of
40-8-1 et seq. apply to exploration, development, and
Forestry, Fire and State Lands, with the consent of the state
extraction of hardrock minerals on all lands. Every operator
agency with jurisdiction over the land. (UTAH CODE ANN.
is obligated to conduct reclamation and is responsible for
§ 65A-4-3).
reclamation costs and expenses. (40-8-12.5).
After a notice of intention for mining operations has been
Mineral deposits in state-owned lands may be leased on a
approved, the operator must provide surety, in a form and
rental and/or royalty basis. (65A-6-1). The Division is
amount determined by either the Division or the Board of Oil,
directed to promulgate rules prescribing the annual rental
Gas and Mining, based on the type of reclamation needed.
and royalty rates. (65A-6-2). Mineral leases must provide
The form of surety that the operator may provide includes,
for a minimum annual rental of not less than $1 per acre.
but is not limited to: collateral, a bond or other form of
(65A-6-4, 65A-6-6).
insured guarantee, deposited securities, or cash.
If any operator fails or refuses to carry out the necessary land
reclamation as outlined in the approved notice of intention,
the Board may, after notice and hearing, declare any surety
filed for this purpose forfeited. The state Attorney General is
to then proceed with the necessary legal actions to obtain
forfeiture. (40-8-14).
CRS-48
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Vermont
A U.S. citizen, after discovering a valuable mine on state
State statutes do not appear to address reclamation or bonding
lands may file a notice of discovery and a bond and then
requirements for hardrock mining operations.
may work such mine or quarry. (VT. STAT. ANN. tit. 29, §
302; see also VT. STAT. ANN. tit. 10, § 2606 for leases on
parklands).
A royalty of 2% of the market value of all mineral products
is required. Valuation for royalty determinations is made
when such products are first in a marketable form. (29, §
302).
Operators must also file a bond with the Commissioner of
Buildings and General Services in such sum and with such
sureties as the Commissioner requires. The bond is to
secure to the state all sums of money due as a result of
mineral production. (29, § 306).
CRS-49
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Virginia
State law authorizes several state agencies to lease the
Regulation of Mining Activity: VA. CODE ANN. §§ 45.1-181
minerals underlying state lands under their jurisdiction for
et seq. apply to all lands. Operators must obtain a mining
mineral production. Rental and/or royalty rates may be set
permit accompanied by an operations plan. The operations
by these agencies as they see fit, except that leases on
plan describes the specifications for surface grading and
certain submerged lands require a royalty. (VA. CODE ANN.
restoration to a surface suitable for the proposed use of the
§§ 28.2-1208, 53.1-31).
land after reclamation is completed. (45.1-182.1).
A bond is required in an amount that is based on the number
of acres of land which the operator estimates will be affected
by mining operations during the next year. The amount may
not be less than $200 nor more than $1,000 per acre. The
minimum amount of bond furnished shall be $1,000, except
in areas of five acres or less, which are subject only to the
general per acre amount requirements. Bonds must be
executed by the operator and a corporate licensed surety; in
lieu of this bond form, the operator may deposit cash or
collateral security acceptable to the Director. (59-8-207).
Bonds may be adjusted annually to reflect new disturbances
and work completed (45.1-185).
CRS-50
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Washington
The Department of Natural Resources may issue permits
Surface Mining Reclamation: WASH. REV. CODE §§
and leases “for prospecting, and contracts for the mining of
78.44.010 et seq. apply to surface mining on all lands. The
valuable minerals and specified materials, except rock,
Department of Natural Resources is given the exclusive
gravel, sand, silt, coal, or hydrocarbons, upon and from any
authority to regulate surface mine reclamation. (78.44.050).
public lands belonging to or held in trust by the state ....”
The Dep’t is responsible for issuing reclamation permits.
(WASH. REV. CODE §§ 79.14.300, 79.14.310).
Permits cannot be issued until the applicant has deposited an
acceptable performance security. (78.44.087). Form: bank
An annual rental as set by the Board of Natural Resources
letters of credit acceptable to the Dep’t; a cash deposit;
is required. (79.14.350). Royalties are required under all
negotiable securities acceptable to the Dep’t; an assignment
mining contracts and mineral leases. The rate is to be set by
of a savings account or interest in real property; a savings
the Board. (79.14.410).
certificate in a WA bank; or an adequate corporate surety
bond. (78.44.087). The Dep’t may determine the amount
using a standardized performance security formula developed
by the Dep’t. Adjustments to the bond amount may be made
at any time. (78.44.087).
Metals mining and milling operations are subject to
additional requirements. (WASH. REV. CODE 78.56.030 et
seq.). The Department of Ecology Metals Mining
Coordinator oversees the permitting, construction, operation,
and reclamation phases of a metals mine project. (78.56.060).
Additional performance security may be required
(78.56.110).
CRS-51
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
West Virginia
The public land corporation, within the Department of
State statute does not appear to address reclamation and
Natural Resources, is vested with the title of the state of
bonding requirements for hardrock mining operations.
West Virginia in public lands and may enter into leases for
the development and extraction of minerals. (W. VA. CODE
§§ 20-1A-1, 20-1A-3, see also § 20-1-7 ).
Minerals may be leased “at not less than the fair market
value, as determined by an appraisal made by an
independent person or firm chosen by the corporation ....”
(20-1A-6). The corporation must also hire an independent
auditing firm to periodically review a lessee’s books and
accounts to ensure that the appropriate royalties are being
paid. (20-1A-6).
A lessee may is also required to provide a bond for the
proper performance of the lease. (20-1A-6).
CRS-52
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Wisconsin
The Board of Commissioners of Public Lands may grant
Metallic Mining Regulation: WIS. STAT. §§ 293.01 et seq.
leases on any public lands, except state park lands and state
apply to all lands. The Department of Natural Resources may
forest lands, to prospect for and to extract ore, minerals and
issue prospecting and mining permits, both of which must be
other deposits. Leases may made be made only for a “full
accompanied by reclamation plans and bonds. It may also
and fair consideration paid or to be paid to the state, the
issue exploration licenses, which also subject licensees to a
amount and terms whereof shall be fixed by said board ....”
bonding requirement. (293.35, 293.37, 293.21).
(WIS. STAT. § 24.39).
Bonds must be signed by an adequate surety and conditioned
on faithful performance of reclamation requirements. In lieu
State park and forest lands may be leased for mineral
of a bond, the operator may deposit cash, certificates of
development. Leases must contain “proper covenants to
deposit, or government securities. The amount of the
guard against trespass and waste.” Any rents arising from
security is to be equal to the estimated cost of reclamation “in
these leases are to be paid into the state treasury.
relation to that portion of the site that will be disturbed by the
Prospecting licenses may also be granted. These require
end of the following year.” (293.51).
“proper security” to ensure that licensees will fully report on
Exploration bonds: Applications for exploration licenses are
mineral discoveries and will restore the surface to its
to be accompanied by a bond in the amount of $5,000
“former condition and value” if no discovery is made.
conditioned on faithful performance of the termination
(26.08).
requirements. (293.21). The amount can be adjusted upward
at any time.
Bond release is governed by § 293.63.
CRS-53
State
State Mineral Royalties and Rental Fees
Reclamation and Bonding
Wyoming
The Board of Land Commissioners may establish rules and
Surface Mining Reclamation: WYO. STAT. ANN. §§ 35-11-
regulations governing the issuance of mineral leases and
401 et seq., applicable to surface mining on all lands. Mining
covering the conduct of development and mining operations.
permits are required and establish that operators must comply
“Mineral leases may be issued upon such monthly or annual
with mining and reclamation plans. Regulations establishing
minimum rental payment basis as shall be fixed by the
specific reclamation standards must be promulgated. (35-11-
board, which payment shall be annually applied against such
402).
royalty as shall accrue for the same lease.” (WYO. STAT.
Mining licenses and the filing of a bond are also required
ANN. § 36-6-101).
before operations can begin. (35-11-410). The Administrator
of the Land Quality Division can fix the amount of, collect,
and maintain performance bond requirements. Minimum:
generally, $1,000 per acre of affected land, total amount may
not be less than $10,000, except for specified minerals or
small operations which must be at least $200 per acre.
Within 90 days after mining operations commence, an
additional bond of $100 per acre may be required if necessary
to insure reclamation. (35-11-401, 35-11-417). Form: All
bonds must be signed by the operator as principal, by a good
and sufficient corporate surety. A self-bonding program may
be created by regulation. (35-11-417).
Release of 75% of bond is authorized on completion of
reclamation plan, but remainder must be retained five years
after the date of reduction. (35-11-423). Forfeiture
procedures are set out in section 35-11-421.
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